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PetroQuest Energy Inc. (NYSE: PQ) has filed to raise up to $200 million million in securities in a mixed securities shelf. Technically, this filing is to replace an existing shelf registration that is expiring on April 11. As this one has been all over the board in share price, we wonder about the chances of this being just another shelf registration replacement for an expiring shelf.
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Daily Archives: April 6, 2009
PetroQuest Energy Files To Raise Cash (PQ)
Junk Bonds To Get Their “Junk” Back
Three years when credit was plentiful and corporate earnings tended to be good because of a booming economy, junk bonds were considers a relatively safe investment.
Over the next five years, investing in high-yield securities may be as dangerous and sky-diving without a chute.
According to Bloomberg, “About 53 percent of U.S. companies that issued high-risk, high-yield bonds will default over the next five years, according to Jim Reid at Deutsche Bank AG.”
Default rates on existing debt may not be the biggest problem in the sector. Read More
Another New Apple (AAPL) iPhone Sighting
The fate of Apple’s (AAPL) shares seems to rise and fall based on rumors that the company will release a new version of its iPhone.
Apple’s shares are up 35% so far this year, so it needs more sightings of iPhone upgrades to keep the stock’s momentum between now and its earnings release. Read More
The Political Risk of Toxic Assets
The administration’s plan is attractive, but are there too many strings attached?
By Ian Bremmer and Sean West of The Big Money
Last week, markets bounced 7 percent the day Treasury Secretary Tim Geithner released his Public-Private Investment Plan. It’s clear why investors reacted positively to a plan that subsidizes private investment through public risk in hopes of getting the financial system functioning normally again. What’s less clear is whether participation makes sense for private investors from a political risk perspective—and whether the administration will be willing to insure against that risk with a commitment of its credibility.
The political risk premium attached to U.S. investments is higher than at any time in recent memory. All corners of the market are depending on Washington to “get it right.” That a bad speech by Geithner could apparently destroy the Dow on Feb. 10 and a good policy release could boost it a month later demonstrates the strong impact politics is having on finance. No investment is immune from politics for the time being.
Proxy Battle Begins in Fertilizer Deal (AGU, CF, TRA)
Canadian fertilizer giant Agrium Inc. (NYSE:AGU) today filed its definitive proxy materials with the SEC in its effort to acquire CF Industries Holdings, Inc. (NYSE:CF) Agrium is asking CF shareholders to withhold votes from CF’s board nominees in an effort to get CF to negotiate a deal. CF’s annual shareholders meeting is scheduled for April 21st.
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Royal Gold Buys into Another Mine (RGLD, TCK)
Royal Gold, Inc. (NASDAQ:RGLD) has agreed to purchase an interest in a Chilean gold mine owned by Teck Cominco Ltd. (NYSE:TCK) for $100 million in cash and about 4.5 million shares of Royal Gold common stock. The company also announced that it would issue 6.5 million new shares of common stock on its existing shelf registration to pay for the acquisition.
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Level 3 Secures More Cash (LVLT)
Level 3 Communications, Inc. (NASDAQ: LVLT) is trading up marginally this morning on word that its subsidiary, Level 3 Financing, Inc., has received additional financing commitments. The additional financing is from lenders to increase the borrowings under its existing $1.4 billion senior secured credit facility. So this is an expansion, and is via the creation of a $220 million Tranche B Term Loan.
Saudi Refinery Back on Track (COP, TOT)
Saudi Arabia’s state-owned oil company Saudi Aramco and ConocoPhillips Corporation (NYSE:COP) are expected to open the bidding for a Saudi-based refinery in Yanbu by the middle of 2009, according to Reuters. The bidding process was stopped last November in the face of turmoil in the financial markets. Conoco and Aramco are also looking for ways to lower the cost of the refinery.
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Brean Murray Comments on Dendreon (DNDN) Following Friday’s Run-Up
Brean Murray comments on Dendreon (Nasdaq: DNDN) this morning, following Friday’s 38% run-up, which they said was related to competitor’s call with a physician in the field and word Provenge Phase 3 trial results being slated for potential presentation on April 28 at the American Urological Association annual meeting. Brean Murray said neither of these changes anything fundamental about the trial outcome.
Margin Squeeze & Contract Changes Up & Down Oil Patch? (TOT, BP, RDS-A, E, SLB, HAL)
Several of the big oil companies are putting the squeeze on oil field services providers to renegotiate contracts and lower costs for drilling services. BP plc (NYSE:BP), Total SA (NYSE:TOT), and Royal Dutch Shell plc (NYSE:RDS-A) are reportedly asking for reductions of as much as 40% from European contractors Technip SA, CGGVeritas, and Saipem SpA, a subsidiary of Italian oil major Eni SpA (NYSE:E).
Goldman Sachs Drops Cisco in Crisco (CSCO)
Cisco Systems Inc. (NASDAQ: CSCO) is getting hit hard on an analyst downgrade this morning. Goldman Sachs has removed the routing and communications leader from its Conviction Buy List and has taken the official rating down to Neutral from Buy. Its $18.00 price target has been achieved in this valuation call, and that is below the $18.16 close on Friday. This move comes on the heels of a fairly large recovery as shares hit as low as $13.61.
Shares are down almost 3% at $17.62 in pre-market trading at 8:48 AM EST. The volume is under 70,000 shares, which is light.
JON C. OGG
Well-Regarded Analyst Turns Very Negative On Banks
Maybe the market’s perception that bank stocks are out of the woods is premature. Many of the stocks in the sector have more than doubled from their early March lows.
According to CNBC, “Michael Mayo, a former Deutsche Bank analyst who now works for CLSA’s Calyon Securities, launched coverage of the banking sector saying that many of the recent fixes in the financial sector are merely `window dressing’ and problems still persist.” Read More
Top Analyst Upgrades (ANF, AEP, BUCY, EXR, IFX, JOYG, LPL, TWX, UTHR, WYNN)
These are some of the top pre-market analyst upgrades and positive research calls we have seen from all Street this Monday morning:
Abercrombie & Fitch (ANF) Started as Buy at Brean Murray.
American Electric (AEP) Raised to Buy at KeyBanc Capital.
Bucyrus (BUCY) Raised to Neutral at JPMorgan.
Extra Space Storage (EXR) Raised to Buy at Citigroup.
Infineon (IFX) Raised to Buy at UBS.
Joy Global (JOYG) Raised to Neutral at JPMorgan.
LG Display (LPL) Started as Buy at Collins Stewart.
Time Warner Cable (TWC) Raised to Buy at Collins Stewart.
United Therapeutics (UTHR) Started as Buy at Lazard Capital Markets.
Wynn Resorts (WYNN) Raised to Buy at UBS.
JON C. OGG
Top Analyst Downgrades (AMT, AXA, NILE, CA, FDS, IBM, IBKR, ICE, NOVL, SBAC, VIA)
These are the top analyst downgrades and cautious calls we have seen from Wall Street analysts this Monday morning:
American Tower (AMT) Cut to Sector Perform at RBC.
AXA (AXA) Cut to Underweight at JPMorgan.
Blue Nile (NILE) Cut to Hold at Citigroup.
CA Inc. (CA) Cut to Hold at Jefferies.
FactSet (FDS) Started as Sell at Auriga.
IBM (IBM) Cut to Hold at Canaccord Adams.
Interactive Brokers (IBKR) Cut to Underperform at KBW.
IntercontinentalExchange (ICE) Cut to Underperform at KBW.
Novell (NOVL) Cut to Hold at Jefferies.
SBA Communications (SBAC) Cut to Sector Perform at RBC.
Viacom (VIA) Cut to Equal Weight at Barclays.
JON C. OGG
Greenspan Didn’t Cause the Housing Boom
By John Tamny of RealClearMarkets
When economic problems reveal themselves, a great deal of finger-pointing inevitably ensues. For quite some time now economists and commentators have sought to place blame for the housing crisis, and quite a lot of it has been heaped on former Federal Reserve Chairman Alan Greenspan. But when it comes to housing, both Greenspan’s critics and Greenspan are wrong about what really happened.
The general consensus among Greenspan’s critics (including the Wall Street Journal’s editorial page, along with Nobel Laureate Gary Becker), is that his 2003 decision to keep the Fed funds rate at 1% for a year led to the rush into housing. Intuitively this makes sense, but if true there would presumably exist a great deal of empirical or anecdotal evidence supporting the notion that housing does best when nominal rates of interest are low. The problem here is that very little evidence supports the claims made by Greenspan’s detractors.
R&D, Which Holds Up In Fourth Quarter, May Dive In The First
According to The Wall Street Journal, large US companies held their R&D spending steady in the fourth quarter of last year even though in most cases their revenue fell.
According to the paper, “Companies by and large realize that large reductions in R&D are suicidal,” says Jim Andrew, a senior partner at the Boston Consulting Group. Similar words may not be heard during the rest of this year. Read More
Five Company’s Earnings Could End The Rally (WMT)(TGT)(MSFT)(GOOG)(DOW)(C)
The assumption is that the earnings for the first quarter from most companies in the S&P 500 will be atrocious. That can be set side-by-side with the fact that the market now appears to be looking for news that is bad, but not as bad as expected. Currently stocks are being driven higher by the sentiment that “troubling, but not disastrous” is good.
Earnings from five companies are likely to set the tone for the market’s direction over the next two months. That is based on their size within the sectors that they represent, or when they report in the earnings cycle. Read More
HSBC (HBC) And The Great American Bank “Stress Test”
The rights offering made by HSBC (HBC) raised over $18 billion and the participation rate was over 96%. That should give banks which may need to raise capital in the near future some hope that private money is sitting on the sidelines looking for good deals in the financial services industry.
But, HSBC does not look like any other American bank, except perhaps the most healthy– JPMorgan (JPM) and Goldman Sachs (GS). Read More
The Prospects Of The Stimulus Package And Bank Bailout Shattered, The Government Runs Low On Options
When Bob Schieffer of “Face The Nation” asked Secretary Geithner if the Administration would have to go back to Congress for more stimulus money because of rapidly rising unemployment, the bureaucrat refused to answer directly, acting as if he believed he would be struck by a bolt of lightning if he did anything beyond dissembling.
If the budget, stimulus package, and bank bailout assumptions for employment and revenue are no longer right, the government’s pot for solving the nation’s economic problems is already light. The Administration’s forecast is that unemployment will average 8.1% this year and 7.9% next year. The CBO estimates are a bit higher. Based on where unemployment stands now and where it will likely be at mid-year, none of those numbers is even remotely realistic. Read More
When Joblessness Becomes Homelessness
If the current recession is the longest since WWII and continues for another year, one of its most frightening characteristics is that the number of people whose jobless benefits run out is going to be large and will almost certainly grow substantially beginning relatively soon. This means that even though giving financial support to the unemployed may be an unbelievable expense, it may actually cost more to remove their government safety net and in some cases allow them to become indigent. Read More
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Today’s top tickerspy Indexes Coffee Stocks +14.4% Modular Building ... +4.3% Cement Stocks +4.1% Fitness and Dieti... +4.0% Platinum and Pall... +3.9% 
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